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Scammers are reportedly prepared to pay €25,000 for German Nokia 1100 handsets, on the basis that they can be reprogrammed to intercept SMS messages and thus crack banking security.

The claim comes from Ultrascan, a security association that generally follows up 419 scams and ID theft. Ultrascan tells us it was approached by Dutch police concerned that the price of a second-hand Nokia 1100 was unexpectedly rising. The company subsequently discovered that buyers were interested in a security flaw that makes the German version of the handset worth so much, though the technical background remains obscure.

The supposed exploit is based around codes - mTAN - that are sent to customers over SMS and are unique to each mobile-banking transaction. The premise is that criminals have "thousands" of login details and just lack these single-use codes, so are trying to get hold of Nokia 1100 handsets to intercept them.

The problem with this hypothesis is that the GSM security model is managed by the SIM, which colludes with the network's authentication server to create an encryption key which is made available to the handset. Communications can only be intercepted by getting hold of that key, or breaking the encryption itself, neither of which is easier to do while in possession of a Nokia 1100, German or otherwise.

We put these technical issues to Ultrascan who told us that it "did not investigate [the technical] part", but is hoping to get hold of a 1100 for testing in the next few days to see what is possible.

In the early days of GSM some operators introduced a critical flaw (zeros) into early versions of GSM cryptography, to enable the use of cheaper SIMs, but almost all operators have since upgraded to proper security and 3G networks have open algorithms that are well known to be pretty secure. Some countries, such as Pakistan, aren't permitted to use cryptography so still suffer from SIM-cloning and the like, but such places don't generally offer mobile banking for obvious reasons.

Ultrascan says it'll be in touch when it has more technical details, but for the moment it's beyond us how one phone can intercept calls made to a different SIM, and it seems more likely that one scammer is simply ripping off another with promises of magic handsets. ®

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